Investing.com– Oil prices rose slightly on Wednesday after two straight sessions in red, taking some support from strong U.S. economic data and hopes of improving demand in Asia, although caution still persisted ahead of more cues on U.S. monetary policy.
rose 0.4% to $76.18 a barrel, while rose 0.4% to $71.48 a barrel by 22:20 ET (02:20 GMT). Both contracts shed over $1 in the past two sessions.
The market had taken little support from a widely-expected in China on Tuesday, given that a cut in mortgage rates disappointed some participants hoping for a bigger reduction.
But the rate cut still brewed some hopes of improving demand in the world’s largest oil importer, with analysts forecasting more stimulus measures from Beijing as it struggles to shore up an economic recovery this year.
Demand in other parts of Asia is also expected to pick up, with analysts predicting an increase in Indian fuel demand as the country’s aviation sector expands.
Powell testimony in focus as U.S. housing data surprises
Focus is now squarely on a before Congress later in the day, which is expected to offer more cues on the path of interest rates.
A sharp spike in U.S. rates dented oil prices over the past year, as traders feared that tighter monetary conditions will dent economic activity and crude demand.
Powell’s testimony is also expected to clear some uncertainty over monetary policy after the Fed offered up mixed signals on the matter last week. The Fed paused its rate hike cycle, but flagged more increases in interest rates later in the year.
Concerns that the Fed may still retain enough headroom to keep raising rates increased after U.S. surprised to the upside for May, although the reading also pointed to some resilience in the U.S. economy.
U.S. inventory data set to offer more cues
While crude prices settled lower in recent sessions, they also did so after a series of wild swings as markets weighed the prospect of tightening supplies, worsening demand and less accommodative monetary conditions across the globe.
U.S. supplies are expected to tighten as energy companies close more oil rigs. But overall fuel demand in the country has also remained muted despite the beginning of the travel-heavy summer season.
Inventory data from the and the is due later this week, and is expected to offer more cues on U.S. supplies and fuel demand.
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